Capital One’s net interest income rose 54% year-over-year in the fourth quarter of fiscal 2025, driven by a 38% increase in credit card loan balances to $175 billion and tighter control of deposit funding costs, which declined by 22 basis points to 1.15%. The addition of Discover Financial’s portfolio contributed roughly $475 million to NII in the quarter, while purchase accounting accretion on the Brex acquisition added another $150 million.

The $5.15 billion acquisition of Brex, completed in late 2024, has already produced $125 million of net fee revenue through cross-selling of corporate payment solutions to 240,000 new small-business clients. Meanwhile, the Discover deal, finalized in mid-2025, expanded Capital One’s co-brand partnerships by 30%, lifting non-interest income by 18% year-over-year. Management expects combined annual cost synergies of $300 million by the end of 2026.

Truist Financial analysts upgraded their outlook on Capital One, citing resilient consumer credit performance and technology investments. They forecast mid-teens EPS growth over the next three years and note a potential 24.9% upside based on their valuation model. However, they warn that concentrated exposure to credit cards leaves the company vulnerable to an economic slowdown, as a 1% rise in delinquencies could depress net charge-off rates by 15–20 basis points and erode earnings momentum.